KWEKWE – Sable Chemicals will continue to use the expensive electrolysis plant due to capitalisation challenges, while the company moves to transform to the cheaper coal gasification process. Report by Blessed Mhlanga
The country’s sole ammonium nitrate producer had planned to decommission the electrolysis plant by December last year and start the process of replacing it with a $200 million coal gasification plant.
Sable Chemicals has been struggling to keep production lines open owing to a huge debt to Zesa estimated at over $30 million. The debt accrued from the government failure to pay a subsidy for Sable under a special arrangement with Zesa.
Zesa has been pulling the plug at will on Sable in a bid to force the TA Holdings controlled company to pay.
The government holds 38% in Sable while AY Investments has 11% shareholding.
Speaking to journalists last Friday during a tour of the plant by Vice-President Joice Mujuru, Sable Chemicals chief executive officer Jack Murehwa said a company could not afford to pay Zesa anything above 3c per kilo watt/hour and remain viable. A kw/h costs on average 9c.
“We cannot pay anything above 3c per kw/h and remain viable. Since this company was established, it has always had a special power tariff and that arrangment still stands,” Murehwa said.
He said Sable did not owe the power company anything, saying they were up to date with their payments.
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“If Zesa expects us to pay anything beyond the 3c kw/h then you should go and ask them why, but we have paid our power bills religiously and are up to date at that rate,” Murehwa said.
He said Sable Chemicals would continue to use the electrolysis plant in the short term while exploring other options of reducing the cost of producing fertiliser.
“We are still exploring the coal gasification process,” Murehwa added.
“In fact, we have just sent coal samples to China for an analysis so that we can determine the type of plant we have to build, but capital constraints are also slowing us down because we don’t have the money now.”
Other options available for the company, according to Murehwa, include exploiting methane gas reserves in Lupane.
